The most recent national accounts data shows that the Australian economy grew by just 0.2% in the September quarter and by 2.1% year-on-year.
In per capita terms, the economy contracted by 0.3% in the year to September following three consecutive quarters of negative growth:
The Australian Industry Group’s latest survey of its members shows that 40% of employers expect business conditions in 2024 to be weaker than in 2023, in what has been dubbed “an economic period similar to the stagflation of the 1970s, with persistent inflation, rising unemployment and weak consumer demand”.
Only 27% of the 320 respondents across a range of sectors anticipate that business conditions will be better than in 2023.
“The economic momentum driven by government support and pent-up consumer demand that lifted us out of the COVID-19 period is clearly over. The clouds of economic slowdown and conditions akin to a recession linger for some key sectors of the economy”, notes AI Group’s CEO, Innes Willox.
The result follows NAB’s business confidence survey, which “crumbled” at year end:
That was the third weakest business confidence reading in the history of the NAB monthly series dating back to 1997 (outside of the GFC and the 2020 covid outbreak).
The decline in confidence follows the sharp lift in interest rates and falling consumer spending, with NAB’s survey also pointing to a sharp downturn in business investment:
The NAB survey also showed that trading conditions plummeted at the end of 2023:
Forward orders also contracted sharply:
Meanwhile, Australian consumers have begun 2024 in a dour mood, with the “weakest January read outside of the early-90s recession”:
This follows the 6% collapse in real per capita household disposable incomes to around 2011 levels:
Clearly, sentiment surrounding the Australian economy has deteriorated as the nation heads into a second consecutive year of declining per capita growth.
